The ARC Energy Investment Forum was Held on April 3, 2017

The ARC Energy Investment Forum was Held on April 3, 2017

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At this unique, one-day forum Peter Tertzakian and Jackie Forrest of the ARC Energy Research Institute, brought together global experts to provoke thought among participants about the battle for the wheels, looking into the future on how new technology will evolve, and how the incumbent petroleum-based technologies will battle back to protect their market share.

The forum included top-tier dialogue and new perspectives on an increasingly contentious subject for energy investors, corporate leaders and policy makers. Topics covered included:

  • Auto sale and mobility trends
  • Electric wheels, benefits and barriers for adoption
  • Electric batteries today, future potential, and factors that shape growth
  • Future innovations for the combustion engine and greener fuels
  • Increasing the barriers to entry: the rapid pace of oil and gas upstream innovation

In the following video, Peter Tertzakian and Jackie Forrest highlight some key insights from the conference.

Speakers at the Event Included:

  • Dr. Steve Koonin,(New York, USA) Former US DOE Under Secretary and Current Director of NYU CUSP
  • Larry Burns, (Detroit, USA)  Advisor to Google (now Waymo) on Self Driving Cars and former Vice President of R&D for GM
  • Peter Tertzakian, (Calgary, Canada) Executive Director, ARC Energy Research Institute
  • James Scongack, (Tiverton, Canada) Vice President, Corporate Affairs and Environment, Bruce Power
  • Rebecca Lindland, (Connecticut, USA) Senior Director of Commercial Auto Insights for Kelley Blue Book
  • Alan Nagel, (Calgary, Canada) SAE Certified Vehicle Electrification Specialist (CVEP), Vtrux Canada (VIA Motors) and Sun Country Highway
  • Andrew Miller, (London, United Kingdom) Analyst, Benchmark Mineral Intelligence
  • Dr. Linda Nazar (Waterloo, Canada) University of Waterloo Professor and Canada Research Chair Solid State Energy Materials
  • Bill Woebkenberg, (Detroit, USA) Transport Fuels Technical and Regulatory Specialist, Aramco Research Center
  • Mark Nantais, (Toronto, Canada) President, Canadian Vehicle Manufacturer’s Association
  • Lawrence Romanosky, (Calgary, Canada) General Sales Manager, Porsche Centre Calgary
  • Doug Suttles, (Calgary, Canada) President and Chief Executive Officer of Encana Corporation
  • Mark Blackwell, (Calgary, Canada) Entrepreneur In Residence at the GE Industrial Internet Accelerator
  • David Mount, (San Francisco, USA) Partner at Kleiner Perkins Caulfield & Byers
  • Kevin Skillern, (San Francisco, USA) Managing Partner, Energy Innovation Capital
  • Jackie Forrest, (Calgary, Canada) Director of Research, ARC Energy Research Institute 

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Photos from the Event:

 

Take a look at some of the extensive media coverage that the event received

Videos:

   Steve Koonin BNN Interview

http://bit.ly/2oJ6cOj

Larry Burns BNN Interview

http://bit.ly/2o3GpSG

BNN Market Close (~42 minutes into video)

http://bit.ly/2nKxbbC

Peter Armstrong – CBC On the Money: Electric Car Threat to Big Oil (Peter Tertzakian Interview)

http://bit.ly/2nEswqK

Dan McGarvey – CBC News at 11 April 4, 2017 (~9:45 into Video)

http://bit.ly/2p1LGbd

Online Articles:

Geoffrey Morgan – Financial Post: Canada’s Oil Industry Ponders its Fate as the Threat of Electric Cars Looms in the Rearview Mirror 

http://bit.ly/2oWqR0V

Deborah Yedlin – Calgary Herald: ARC Forum Shows Future Potential of Energy Sector

http://bit.ly/2nYncR0

Dan McGarvey- CBC News: Electric Car Growth ‘Could Really Change the Outlook for Oil’ Calgary Forum Hears

http://bit.ly/2oDx2dT

Chris Varcoe – Calgary Herald: Evolution or Revolution, Change is Inevitable for Auto Sector

http://bit.ly/2p1qQJ6 

Pat Roche – Daily Oil Bulletin: As Tesla Surges Past Ford’s Market Cap, Calgary Conference Ponders Future of Oil

http://bit.ly/2nYa2Dt

Pat Roche – Daily Oil Bulletin: Reviewing CAFE Rules Won’t Affect Commitment to Electric Vehicles, Carmaker Group Says

http://bit.ly/2oYogqP

Pat Roche – Daily Oil Bulletin: Case for Self-Driving Cars Laid Out at Conference; What is the Oil Industry’s Challenge?

http://bit.ly/2orhWYf 

March 27, 2017 Charts

March 27, 2017 Charts

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Trump granted KXL a presidential permit; US crude oil inventories rose to a new record; The US added 21 oil rigs last week

Commentary – Keystone XL: No Longer Just a Pipe Dream

Commentary – Keystone XL: No Longer Just a Pipe Dream

Produced by Jackie Forrest | by

After nine years and many twists and turns, the Keystone XL (KXL) pipeline project took a major step forward last Friday when Donald Trump’s State Department granted the project a presidential permit. This decision is a White House U-turn from a few years ago when Barack Obama rejected the pipeline, saying “the Keystone XL Pipeline would not serve the national interest of the United States.”[1]

While almost a decade has passed since the start of the KXL process, the pipeline still makes sense to northern latitude oil producers and southern refiners. The 830,000 B/d line would move growing supplies of oil sands from Western Canada to the massive US Gulf Coast refining center, the world’s largest heavy oil processing complex. It would also pick-up lighter crude oil from North Dakota, en route.

Although the United States is ramping-up its own production; expanding local supply does not diminish the need for the KXL pipeline. The crude oils produced in Texas and Oklahoma are light grades, making them poor fits for the complex refineries on the US Gulf Coast, that have an appetite for heavy crude oil.

The next step in the process for approving KXL is receiving state level approvals and permits, including the green light for a new route around the Ogallala aquifer in Nebraska. TransCanada issued a press release earlier this year, predicting that the Nebraska process  would be concluded in 2017.  Assuming no major delays to this timeline, plus a two-year construction period, KXL could be operational by 2019.

Since existing export pipelines are starting to hit their limits for moving additional barrels of heavy oil, new pipeline capacity is required.  Last month, Enbridge’s Al Monaco, the head of Western Canada’s largest oil pipeline company stated “we are very near maximum capacity. That should be the case for a couple of years at least.”[2]

And despite the downturn, Western Canadian supply is still growing.  Projects that were sanctioned when the oil price was higher are expected to increase supplies by nearly 700,000 B/d between now and 2020.  Without more pipeline capacity, this new oil will have to move to market by rail car or other forthcoming pipeline capacity additions.

With oil sands growth less certain beyond 2020, it is possible that the eventual construction of KXL could delay the timeline for other pipeline projects, including Energy East and the Trans Mountain Expansion project.  But even with KXL, Canada should still press forward with efforts to build pipelines on Canadian soil to new markets. There are many lessons to be gained from the near decade long KXL saga; including the value of Canada having more than one customer and the importance of keeping control over its upstream infrastructure. Without it, Canada risks being held hostage to US politics.

[1]            “Statement by the President on the Keystone XL Pipeline,” The White House, Office of the Press Secretary, November 6, 2015:  https://obamawhitehouse.archives.gov/the-press-office/2015/11/06/statement-president-keystone-xl-pipeline

[2]           “Edited Transcript – Q4  2016 Engbridge Inc and Enbridge Income Fund Holdings Inc Earnings Call,” Thomson Reuters StreetEvents, February 17, 2017: http://www.enbridge.com/~/media/Enb/Documents/Investor%20Relations/2016/2016_YE_ENB_ENF_Transcript.pdf

Commentary – Oil Demand Keeps on Truckin’

Commentary – Oil Demand Keeps on Truckin’

Produced by Peter Tertzakian | by

Wow. It’s not often a chart can say so much about human behaviour, economic theory, oil consumption and maybe even the future of energy all in one spreadsheet column.

For one thing, the data I show this week confirms the maxim that “size matters.” When it comes to buying a new vehicle in North America, the bigger-is-better sentiment has been growing over the past 30 years, and especially so in the past three.

The simple line graph in Figure 1 shows the percentage of people that walk into a car dealership in the United States, kick a few tires of various size, and then drive off with a new pick-up truck or SUV. That choice trumps opting for a more modest set of wheels on a smaller car. Canadian data reflects similar buying sentiments.

Back in 2006, new car buyers began shifting to smaller vehicles, because the price of oil (hence gasoline) was rising quickly. Then came the Financial Crisis, which further amplified frugality. On the flip side, it’s quite remarkable what a recovering economy and cheap oil will do to consumer choice of mobility.

Never in the history of the automobile has the shift to progressively bigger vehicles been as aggressive as the last three. Back in 2013 the split was 50/50 – an average new car buyer could swing either way between big or small. Three years later almost two-thirds now choose a pickup truck or SUV.

From the perspective of energy demand, size matters in vehicle choice. That’s because fuel economy is dominantly a function of weight followed by aerodynamics. Larger vehicles mean more metal to haul around and box-like profiles means more drag. On average an SUV weighs about 1,000 pounds more than a car; a pickup truck 1,500 pounds greater.

Fuel economy differences between cars and light trucks are fairly stark. On average, a pickup truck will get 20 mpg (11.7 L/100km) versus 30 mpg (7.8 L/100km) for a regular car.

It’s true that technology and material weight reduction has improved fuel economy of all vehicle classes over time. But an important principle of energy economics is validated by the consumer data: Many gains realized through fuel economy and fuel prices are quickly eroded by people buying bigger vehicles and driving more. In other words, people eat their efficiency gains by consuming more.

This is nothing new; Figure 2 shows a 40+ year view of the expanded data in Figure 1. The same pattern happened back in the late 1970s during and after the oil price shocks. High gasoline prices put the brakes on big cars and people shifted their tastes to smaller vehicles like the Ford Pinto. But it was back to bigger-is-better by 1982. And like today fuel consumption numbers began to grow again.

Bigger, energy obese vehicles are back in vogue in a big way. And it’s not just in the Western world. The Lincoln Navigator is being resurrected in China feeding off the base human instinct that size matters. Around the world gasoline consumption is growing at a rate that is likely to set new records this summer; by association the global use of oil is barreling toward a staggering 100 million barrels every day.

The propensity for consumers to buy oversized petroleum powered vehicles highlights an oversized inconsistency in near-term arguments about “the end of oil.” Any influences acting to make oil cheaper—either on the supply side or demand side—is serving to only strengthen the pervasiveness and dominance of the product.